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What changed in TOMI Environmental Solutions, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TOMI Environmental Solutions, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+303 added−295 removedSource: 10-K (2025-04-14) vs 10-K (2024-04-01)

Top changes in TOMI Environmental Solutions, Inc.'s 2024 10-K

303 paragraphs added · 295 removed · 170 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

59 edited+21 added−16 removed78 unchanged
Biggest changeLaunched in sequential order as listed to either strategically address the needs and/or ensure compliance with the specific regulations governing each industry segment. Life Sciences SteraMist iHP is designed to be tailored to provide a complete solution to address the regulatory inspections of disinfecting/decontaminating and Installation Qualification (IQ)-Operational Qualification (OQ)–Performance Qualification (PQ) validation processes within the life sciences industry.
Biggest changeLife Sciences SteraMist iHP is designed to be tailored to provide a complete solution to address the regulatory inspections of disinfecting/decontaminating and Installation Qualification (IQ)-Operational Qualification (OQ)–Performance Qualification (PQ) validation processes within the life sciences industry. 6 Table of Contents The life sciences sector demands rigorous decontamination procedures to ensure the integrity and safety of pharmaceutical products, medical devices, and research environments.
SteraMist Custom Engineered System The SteraMist Customer Engineered System (“CES”) permanent installation is perfect for any room that requires routine automated decontamination. The CES is an automated system that is installed and plumbed utilizing the facilities’ existing HVAC system.
SteraMist Custom Engineered System (CES) The SteraMist Customer Engineered System (“CES”) permanent installation is perfect for any room that requires routine automated decontamination. The CES is an automated system that is installed and plumbed utilizing the facilities’ existing HVAC system.
We have filed and have been granted or have pending acceptance on 32 separate design patents for our: Decontamination Chamber(s), Decontamination Applicator, Decontamination Cart, Applicator, and Surface Mounted Applicator 90-Degree Device. These patents are published around the world, including but not limited to United States, China, Hong Kong, Europe, United Kingdom, Singapore, Taiwan, Vietnam, Canada, South Korea, and Japan.
We have filed and have been granted or have pending acceptance on 32 separate design patents for our: Decontamination Chamber(s), Decontamination Applicator, Decontamination Cart, Applicator, and Surface Mounted Applicator 90-Degree Device. These patents are published around the world, including but not limited to the United States, China, Hong Kong, Europe, United Kingdom, Singapore, Taiwan, Vietnam, Canada, South Korea, and Japan.
We have submitted utility patent applications in multiple countries, including Europe, China, Brazil, Korea and Australia for further additional applications of SteraMist BIT, and a related application has already been determined novel and inventive in Taiwan, Japan, Israel, New Zealand, Australia and Singapore.
We have submitted utility patent applications in multiple jurisdictions and countries, including Europe, China, Brazil, Korea and Australia for further additional applications of SteraMist BIT, and a related application has already been determined novel and inventive in Taiwan, Japan, Israel, New Zealand, Australia and Singapore.
In 2021, SteraMist BIT 0.35% hydrogen peroxide received its EPA registration (#90150-3), and on June 2, 2022, SteraMist was added to its seventh EPA’s List, List Q for combating rare or novel viruses like Monkeypox virus and SARS-CoV-2 variants causing COVID-19. TOMI continuous to build its portfolio of feasibility studies with renowned and trusted partners. In 2023, the U.S.
In 2021, SteraMist BIT 0.35% hydrogen peroxide received its EPA registration (#90150-3), and on June 2, 2022, SteraMist was added to its seventh EPA’s List, List Q for combating rare or novel viruses like Monkeypox virus and SARS-CoV-2 variants causing COVID-19. TOMI continues to build its portfolio of feasibility studies with renowned and trusted partners. In 2023, the U.S.
In 2023, we made significant strides in boosting brand awareness within the food safety industry through targeted promotion and marketing initiatives. Leveraging a similar strategy to what proved successful in the Life Sciences sector; we focused on building a customer base through referrals and feasibility studies, gradually expanding our reach.
We have made significant strides in boosting brand awareness within the food safety industry through targeted promotion and marketing initiatives. Leveraging a similar strategy to what proved successful in the Life Sciences sector, we focused on building a customer base through referrals and feasibility studies, gradually expanding our reach.
Information contained on our website is not incorporated by reference unless specifically stated therein. 16 Table of Contents In addition, the SEC maintains a website that contains reports, proxy statements, and other information about issuers, such as TOMI, who file electronically with the SEC. The address of the website is www.sec.gov .
Information contained on our website is not incorporated by reference unless specifically stated therein. 15 Table of Contents In addition, the SEC maintains a website that contains reports, proxy statements, and other information about issuers, such as TOMI, who file electronically with the SEC. The address of the website is www.sec.gov.
Recently, we have expanded our trademark protection into India. 15 Table of Contents Marketing and Distribution Through our brand awareness, marketing, social media presence and sales, our business growth objective is to be the global leader in disinfection and decontamination products sales, services, and manufacturing.
Recently, we have expanded our trademark protection into India. 14 Table of Contents Marketing and Distribution Through our brand awareness, marketing, social media presence and sales, our business growth objective is to be the global leader in disinfection and decontamination products sales, services, and manufacturing.
By demonstrating the effectiveness and value in a highly regulated and demanding sector, we establish credibility and trust that can facilitate broader adoption across other facilities, companies, and even industries. 6 Table of Contents The insights gained from working closely with life sciences companies also inform our product development and service offerings, enabling us to better meet the evolving needs of markets.
By demonstrating the effectiveness and value in a highly regulated and demanding sector, we establish credibility and trust that can facilitate broader adoption across other facilities, companies, and even industries. The insights gained from working closely with life sciences companies also inform our product development and service offerings, enabling us to better meet the evolving needs of markets.
The Surface Unit is sold with a case of BIT Solution of four-gallon bottles. SteraMist Transport The SteraMist Transport unit, an all-in-one dual voltage fogging product designed to treat a wide variety of vehicle sizes with an application time of only 20 minutes per 1,000 cubic feet. Additional features include remote start and cycle notification lights.
The Surface Unit is sold with a case of BIT Solution of four-gallon bottles. 11 Table of Contents SteraMist Transport The SteraMist Transport unit, an all-in-one dual voltage fogging product designed to treat a wide variety of vehicle sizes with an application time of only 20 minutes per 1,000 cubic feet. Additional features include remote start and cycle notification lights.
As these relationships continue to grow, we are confident that the groundwork laid in 2023 will soon yield tangible results, driving further adoption and utilization of SteraMist solutions worldwide. 12 Table of Contents SteraMist Hybrid The SteraMist Hybrid, a combination of innovation, seamlessly integrating our CES’s elegant permanently installed stainless-steel applicators with the generator of the ENV.
As these relationships continue to grow, we are confident that the groundwork laid in 2023 will soon yield tangible results, driving further adoption and utilization of SteraMist solutions worldwide. Hybrid The SteraMist Hybrid, a combination of innovation, seamlessly integrating our CES's elegant permanently installed stainless-steel applicators with the generator of the ENV.
By emphasizing the importance of maintaining clean and safe environments as a preemptive measure providing long-term benefits of proactive disinfection in ensuring the health and well-being of their employees, customers, and communities, rather than merely reacting to immediate threats, we are promoting a culture of preventive healthcare via our TSN.
By emphasizing the importance of maintaining clean and safe environments as a preemptive measure providing long-term benefits of proactive disinfection in ensuring the health and well-being of their employees, customers, and communities, rather than merely reacting to immediate threats, we are promoting a culture of preventive healthcare.
The generator is strategically positioned in a centralized location of the facility through a docking station or hub. Central to its operation is the Hybrid connection hub, linking the applicators to the ENV and powering the automation of SteraMist iHP decontamination. Compliant with cGMP, GMP, and ISO standards, the Hybrid is designed with specific self-programming capabilities.
The generator is strategically positioned in a centralized location of the facility through a docking station or hub. Central to its operation is the Hybrid connection hub, linking the applicators to the ENV and powering the automation of SteraMist iHP decontamination. 12 Table of Contents Compliant with cGMP, GMP, and ISO standards, the Hybrid is designed with specific self-programming capabilities.
We also operate across diverse sectors such as Life Sciences, Hospital-Healthcare, Food Safety, and everyday buildings visited by people, and provide the option for routine and emergency treatment through our service provider membership, the TOMI Service Network (“TSN”). Our revenue is derived from a variety of industry groups.
We also operate across diverse sectors such as Life Sciences, Hospital-Healthcare, Food Safety, and everyday buildings visited by people, and provide the option for routine and emergency treatment through our service provider membership. Our revenue is derived from a variety of industry groups.
Comprehensive Coverage: SteraMist reaches every nook and cranny, ensuring thorough disinfection of all areas. No Preconditions: SteraMist does not require preconditioning of the space before treatment, streamlining the entire process. Equipment Safety: Our gentle process ensures sensitive electronics and equipment are safeguarded against corrosion.
Comprehensive Coverage: SteraMist reaches every nook and cranny, ensuring thorough disinfection of all areas. 10 Table of Contents No Preconditions: SteraMist does not require preconditioning of the space before treatment, streamlining the entire process. Equipment Safety: Our gentle process ensures sensitive electronics and equipment are safeguarded against corrosion.
We are also pursuing IP protection for further applications of our SteraMist BIT in diverse fields in multiple jurisdictions, such as food decontamination and, in installed systems for the application of iHP for the protection of buildings post outbreak or after a biological attack.
We are also pursuing IP protection for further applications of our SteraMist BIT in diverse fields in multiple jurisdictions, such as food decontamination in the US and, in installed systems for the application of iHP for the protection of buildings post outbreak or after a biological attack in the US, China, Europe and Japan.
These endorsements signify our commitment to safeguarding our world against any potential threats. Our Customers We empower our customers to create a healthier and safer world by offering innovative products and services spanning life sciences, healthcare, food safety, and everyday visited facilities.
These endorsements signify our commitment to safeguarding our world against any potential threats. 5 Table of Contents Our Customers We empower our customers to create a healthier and safer world by offering innovative products and services spanning life sciences, healthcare, food safety, and everyday visited facilities.
SteraMist technicians provide an efficient 4-step facility disinfection decontamination: site review, protocol generation, deployment and service, and post-treatment reporting. 13 Table of Contents TOMI’s iHP service department continues to grow with new and existing customers in several divisions.
SteraMist technicians provide an efficient 4-step facility disinfection decontamination: site review, protocol generation, deployment and service, and post-treatment reporting. TOMI’s iHP service department continues to grow with new and existing customers in several divisions.
Research and development expenses for the years ended December 31, 2023 and 2022, were approximately $492,000 and $352,000, respectively. Government Regulation Our business is subject to various degrees of governmental regulation in the countries in which we operate.
Research and development expenses for the years ended December 31, 2024 and 2023, were approximately $291,000 and $492,000, respectively. Government Regulation Our business is subject to various degrees of governmental regulation in the countries in which we operate.
Competition is intense in all five of our divisions and includes many large and small competitors.
Competition is intense in all four of our divisions and includes many large and small competitors.
Our custom generator enclosure is shipped unassembled for integration by Original Equipment Manufacturer or OEMs, providing the flexibility to mount and fully integrate iHP control panel components and applicators into OEM enclosure. This design ensures that the generator remains out of sight while providing customers an easier method of purchasing iHP as their decontamination solution in a turnkey product.
The SIS-MFG is an iHP enclosure integrated by Original Equipment Manufacturer or OEMs, providing the flexibility to mount and fully integrate iHP control panel components and applicators into OEM enclosure. This design ensures that the generator remains out of sight while providing customers an easier method of purchasing iHP as their decontamination solution in a turnkey product.
We consider our brand names and trademarks to be valuable in the marketing of our products. As of today, we have over two hundred trademarks or trademark applications, (word and/or logo) registered or pending across the globe.
Our products are sold around the world under various brand names and trademarks. We consider our brand names and trademarks to be valuable in the marketing of our products. As of today, we have over two hundred trademarks or trademark applications, (word and/or logo) registered or pending across the globe.
Employees As of March 7, 2024, we have 26 full-time executive, operational and administrative employees working within the United States. Most of our sales are conducted by global exclusive distribution agreements or domestically by our internal sales team or independent manufacturing representatives.
Employees As of April 10, 2025, we have 20 full-time executive, operational and administrative employees working within the United States. Most of our sales are conducted by global exclusive distribution agreements or domestically by our internal sales team or independent manufacturing representatives.
Three SteraMist applicators achieve a thorough full room disinfection decontamination of a sealed space up to 103.8 m3 (3,663 ft3) in just under 45 minutes (application and dwell time). Individually, each remote applicator can be used to treat a space of approximately 34.6 m3 (1,221 ft3). Injection times are based on individual room size and number of applicators.
Three SteraMist applicators achieve a thorough full room disinfection decontamination of a sealed space up to 103.8 m 3 (3,663 ft 3 ) in just under 45 minutes (application and dwell time). Individually, each remote applicator can be used to treat a space of approximately 34.6 m 3 (1,221 ft 3 ).
Additional features include downloadable and printable cycle data in PDF format (lot # of BIT Solution, location identifier, injection/dwell/aeration times, and error notifications) and audit reporting. These features are required for many Life Science facilities.
Additional features include downloadable and printable cycle data in PDF format (lot # of BIT Solution, location identifier, injection/dwell/aeration times, and error notifications) and audit reporting. These features are required for many Life Science facilities. The ENV is sold with a case of BIT Solution of four-gallon bottles.
This translates to millions of cases annually, with significant economic burdens and human costs. Furthermore, the emergence of antimicrobial-resistant pathogens poses a growing threat, exacerbating the challenge of infection control in healthcare settings. Effective disinfection measures, including the use of advanced technologies like SteraMist, are essential for reducing the incidence of HAIs and safeguarding patient health.
Furthermore, the emergence of antimicrobial-resistant pathogens poses a growing threat, exacerbating the challenge of infection control in healthcare settings. Effective disinfection measures, including the use of advanced technologies like SteraMist, are essential for reducing the incidence of HAIs and safeguarding patient health.
According to the World Health Organization, HAIs affect millions of patients globally each year, leading to prolonged hospital stays, increased healthcare costs, and deaths. In 2024, it’s estimated that approximately 7-10% of patients admitted to healthcare facilities worldwide will acquire at least one HAI during their stay.
According to the World Health Organization, HAIs affect millions of patients globally each year, leading to prolonged hospital stays, increased healthcare costs, and deaths. Approximately 7-10% of patients admitted to healthcare facilities worldwide will acquire at least one HAI during their stay. This translates to millions of cases annually, with significant economic burdens and human costs.
Today, our impressive roster of clients includes Tower Health, Novant Health, Pfizer, Merck, Fresenius Kabi, DKI, First Onsite, Fleet, Nestle Purina, Simplot, Perdue, and various government agencies such as the National Institutes of Health (“NIH”) and United States Department of Agriculture (“USDA”). The Company is equipped for when these esteemed organizations prioritize expanding their use of SteraMist iHP.
Today, our impressive roster of clients includes Tower Health, Novant Health, Pfizer, Merck, Fresenius Kabi, DKI, First Onsite, Fleet, Nestle Purina, Simplot, Perdue, and various government agencies such as the National Institutes of Health (“NIH”) and United States Department of Agriculture (“USDA”).
Food Safety Every day there are news articles around the world pertaining to the contamination of food supply. Unsafe food containing harmful bacteria, viruses, parasites, or chemical substances causes more than 200 diseases. It also creates a vicious cycle of disease and malnutrition, particularly affecting infants, young children, elderly and the sick.
Unsafe food containing harmful bacteria, viruses, parasites, or chemical substances causes more than 200 diseases. It also creates a vicious cycle of disease and malnutrition, particularly affecting infants, young children, elderly and the sick.
This adaptability ensures effective and efficient disinfection solutions for various environments and applications. 10 Table of Contents SteraPak The all-in-one SteraPak places the SteraMist iHP technology onto the technicians back, delivering premium disinfection utilizing a rechargeable battery and cordless operation.
Injection times are based on individual room size and number of applicators. This adaptability ensures effective and efficient disinfection solutions for various environments and applications. SteraPak The all-in-one SteraPak places the SteraMist iHP technology onto the technicians back, delivering premium disinfection utilizing a rechargeable battery and cordless operation.
We owe our success to the collaborative efforts of Titan Defense and DARPA who uncovered a superior technology that mimics nature’s cleansing mechanism, bringing this natural phenomenon indoors providing a competitive edge that exceeds the capabilities of our competition in the healthcare disinfection, life sciences decontamination, and food safety sanitization markets. 4 Table of Contents The Science Behind the Technology Introducing a revolutionary approach to disinfection and decontamination, our technology offers a streamlined and effective solution.
We attribute our success to the collaborative efforts of Titan Defense and DARPA who uncovered a superior technology that mimics nature’s cleansing mechanism, bringing this natural phenomenon indoors and providing us with a competitive edge in the healthcare disinfection, life sciences decontamination, and food safety sanitization markets. 4 Table of Contents We believe that we possess the best technologies in the world in the disinfection and decontamination space.
Food safety regulations mandate strict sanitation practices in food handling and processing facilities to ensure the production of safe and hygienic food products. Sanitation plays a critical role in preventing contamination and the spread of foodborne illnesses.
Food safety regulations mandate strict sanitation practices in food handling and processing facilities to ensure the production of safe and hygienic food products. Sanitation plays a critical role in preventing contamination and the spread of foodborne illnesses. Regulations typically outline requirements for cleaning and disinfecting food contact surfaces, equipment, utensils, and facilities to remove dirt, debris, and harmful microorganisms.
By fostering relationships with key supporters of our technology and remaining patient in our approach, we have finally laid a foundation. In 2024, we expect to continue to expand and grow our presence in this critical market segment.
By fostering relationships with key supporters of our technology and remaining patient in our approach, we have finally laid a foundation and expect to continue to expand and grow our presence in this critical market segment. Commercial In line with adopting a proactive approach through our service providers, it’s imperative for the entire commercial world to follow suit.
By harnessing the power of atmospheric chemistry, our process converts 7.8% hydrogen peroxide into a plasma-generated hydroxyl radical, achieving a 6-log and greater kill of pathogens leaving only oxygen and humidity as by-products. It’s a simple yet effective solution that sets a new standard for global cleaning disinfection decontamination practices.
The Science Behind the Technology Introducing a revolutionary approach to disinfection and decontamination, our technology offers a streamlined and effective solution. By harnessing the power of atmospheric chemistry, our process converts 7.8% hydrogen peroxide into a plasma-generated hydroxyl radical, achieving a 6-log and greater kill of pathogens leaving only oxygen and humidity as by-products.
Implementing proactive disinfection measures can minimize the potential for legal and financial repercussions resulting from health-related incidents. 8 Table of Contents TOMI, in conjunction with its partners, collaborators, and industry associations, is proactively educating the community on the importance of preventive disinfection through verbal explanation and visual demonstrations of the impact of maintaining a clean environment.
TOMI, in conjunction with its partners, collaborators, and industry associations, is proactively educating the community on the importance of preventive disinfection through verbal explanation and visual demonstrations of the impact of maintaining a clean environment.
Some of these competitors may have longer operating histories, greater name recognition, larger installed customer bases and substantially greater financial and marketing resources than us. 9 Table of Contents Ultimately, against all competitors and their products, TOMI SteraMist prevails when the following is prioritized by a facility and user: Speed: SteraMist offers rapid turnaround times providing a near kill on contact to pathogens, resulting in faster re-entry and use to the treated area.
Ultimately, against all competitors and their products, TOMI SteraMist prevails when the following is prioritized by a facility and user: Speed: SteraMist offers rapid turnaround times providing a near kill on contact to pathogens, resulting in faster re-entry and use to the treated area.
BIT technology was initially developed in response to weaponized anthrax spore attacks, and detailed testing performed by DARPA demonstrated the success of the technology in neutralizing chemical warfare agents.
It is a simple yet effective solution that sets a new standard for global cleaning disinfection decontamination practices. BIT technology was initially developed in response to weaponized anthrax spore attacks, and detailed testing performed by DARPA demonstrated the success of the technology in neutralizing chemical warfare agents.
The Company is committed to further expanding its marketing, advertising, and educational campaigns aimed at its customer base and driving adoption of our SteraMist iHP product line across all our industries: Life Sciences, Hospital-Healthcare, TOMI Service Network, Food Safety, and Commercial.
By further implementing these strategies and our reach, we can effectively convey the importance of proactive disinfection and inspire action among businesses and individuals to prioritize cleanliness and hygiene in commercial settings. 8 Table of Contents The Company is committed to further expanding its marketing, advertising, and educational campaigns aimed at its customer base and driving adoption of our SteraMist iHP product line across all our industries: Life Sciences, Hospital-Healthcare, TOMI Service Network, Food Safety, and Commercial.
Initially, systems were provided by outsourced consultants with the assistances of certified TOMI personnel, but now TOMI offers an all-inclusive package directly, providing an additional source of revenue.
Initially, systems were provided by outsourced consultants with the assistances of certified TOMI personnel, but now TOMI offers an all-inclusive package directly, providing an additional source of revenue. 13 Table of Contents In 2024, we significantly expanded our support services for customers, offering a comprehensive range of options.
The cart houses our Surface Unit, a portable H 2 O 2 monitor, Carbon Air Scrubber, Respiratory Protection System with positive pressure air flow, storage hooks, and a sign notifying the room is being treated. Included with the Cart is a custom ICU 55-minute terminal cleaning protocol.
The SteraMist Total Disinfection Cart The Total Disinfection Cart was designed with input of public healthcare facilities EVS (Environmental Service) teams. The cart houses our Surface Unit, a portable H 2 O 2 monitor, Carbon Air Scrubber, Respiratory Protection System with positive pressure air flow, storage hooks, and a sign notifying the room is being treated.
By integrating SteraMist iHP technology into facilities now, we not only mitigate existing risks but also strengthen defenses against future challenges the world may face. Establishing a culture of safety and hygiene through routine cleaning disinfection protocols employers instill confidence among their patients, researchers, employees, students, emergency responders - showcasing a commitment to the well-being of everyone.
Establishing a culture of safety and hygiene through routine cleaning disinfection protocols employers instill confidence among their patients, researchers, employees, students, emergency responders - showcasing a commitment to the well-being of everyone.
The life sciences industry was among the first to embrace the Company’s innovative decontamination solutions, recognizing the limitations of traditional methods and effects on progress. Our current portfolio of life science customers, including Fortune 100 companies has been able to overcome the constraints imposed by outdated practices, paving the way for enhanced efficiency, safety, and productivity in their operations.
Our current portfolio of life science customers, including Fortune 100 companies, has been able to overcome the constraints imposed by outdated practices, paving the way for enhanced efficiency, safety, and productivity in their operations. Their early adoption of our SteraMist iHP lays a solid foundation for our future expansion.
The life sciences sector demands rigorous decontamination procedures to ensure the integrity and safety of pharmaceutical products, medical devices, and research environments. With the evolving landscape of the pharmaceutical market, there is an increasing demand for fully automated decontamination products that offer quick turnaround times to minimize downtime and expedite production cycles.
With the evolving landscape of the pharmaceutical market, there is an increasing demand for fully automated decontamination products that offer quick turnaround times to minimize downtime and expedite production cycles. The life sciences industry was among the first to embrace the Company’s innovative decontamination solutions, recognizing the limitations of traditional methods and effects on progress.
Our portfolio includes more than 25 Utility or Design Patents worldwide which expire at various dates through the year 2038 for both method and system claims on SteraMist® BIT™, as well as design of devices. We continue to pursue further claims to additional capabilities in on-going United States and worldwide patent applications.
TOMI maintains all creative control throughout the design and manufacturing process, which includes research & development through final product fabrication. Intellectual Property Our portfolio includes more than 25 Utility or Design Patents worldwide which expire at various dates through the year 2038 for both method and system claims on SteraMist® BIT™, as well as design of devices.
Disinfection helps mitigate the risk of liability claims associated with poor health and safety practices.
Disinfection helps mitigate the risk of liability claims associated with poor health and safety practices. Implementing proactive disinfection measures can minimize the potential for legal and financial repercussions resulting from health-related incidents.
We have obtained three related United States utility patents, giving us protection of our technology until the year 2038. We have obtained utility patents for our technologies in diverse countries such as Brazil, Japan, Korea, Israel, Australia, Taiwan, Canada, Mexico, Europe, Singapore, New Zealand, and, currently pending, in the UK, and continue to pursue protections all over the world.
We have obtained utility patents for our technologies in diverse countries such as Brazil, Japan, Korea, Israel, Australia, Taiwan, Canada, Mexico, Singapore, New Zealand, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Sweden and in the UK, and continue to pursue protections all over the world, including China and Europe.
Emphasizing the efficiency, efficacy, and cost-effectiveness of SteraMist in eliminating pathogens and reducing the risk of healthcare-associated infections will be essential in gaining traction in the market. Additionally, investing in targeted marketing campaigns and educational initiatives to raise awareness about the benefits of automated disinfection processes can help overcome resistance to change and accelerate market penetration.
Emphasizing the efficiency, efficacy, and cost-effectiveness of SteraMist in eliminating pathogens and reducing the risk of healthcare-associated infections will be essential in gaining traction in the market.
While the pandemic may have initially spurred reactive measures, we are advocating for a shift towards proactive, ongoing disinfection protocols. 7 Table of Contents Through consistent and persistent efforts, we are slowly but steadily changing minds across all industries that individuals interact with in their daily lives.
Through consistent and persistent efforts, we are slowly but steadily changing minds across all industries that individuals interact with in their daily lives.
We sell our products domestically and internationally through our internal sales force, as well as independent sales and manufacturing representatives. Internationally, our products are sold through exclusive and non-exclusive sales representatives and distributors. During 2023, we focused on expanding our network of distributors and sale representative and business development initiatives.
We sell our products domestically and internationally through our internal sales force, as well as independent sales and manufacturing representatives. Internationally, our products are sold through exclusive and non-exclusive sales representatives and distributors. Research & Development Our research and development efforts focus on improving, extending and applying our proprietary technology in the field of mechanical cleaning and decontamination.
Our current patents with claims to systems already serve to provide protection for our technology in this area and our on-going pending applications will further enhance the scope of our intellectual property. Our products are sold around the world under various brand names and trademarks.
Our current patents with claims to systems already serve to provide protection for our technology in this area and our on-going pending applications will further enhance the scope of our intellectual property. Initial positive search reports for our filed improvement applicator designs in cell biology may be followed by national stage applications in many countries.
Commercial In line with adopting a proactive approach through our TOMI Service Network, it’s imperative for the entire commercial world to follow suit. Proactive disinfection practices not only ensure the health and safety of employees, customers, and visitors but also safeguard business continuity and reputation.
Proactive disinfection practices not only ensure the health and safety of employees, customers, and visitors but also safeguard business continuity and reputation.
Our SteraMist ® equipment is manufactured by ISO9001 registered companies with multiple facilities in Pennsylvania, Delaware, New Jersey, North Carolina, California, and Australia. Our solution is blended by an EPA approved blender; our blend includes one sole active ingredient, 7.8% Hydrogen Peroxide. TOMI maintains ownership of all the SteraMist ® product lines, including our BIT ™ Solution.
Our solution is blended by an EPA approved blender; our blend includes one sole active ingredient, 7.8% Hydrogen Peroxide. TOMI maintains ownership of all the SteraMist ® product lines, including our BIT ™ Solution. Neither our manufacturer nor chemical blender may make modifications to the manufacturing or blending of our products without our request or consent in written format.
We now provide a wide array of products and services customized to meet the unique operational needs of our global clientele, providing a customizable approach to our customers and elevating their overall performance. In 2023, TOMI expanded its network of international distributors and partnered for the first time with distributors domestically.
We now provide a wide array of products and services customized to meet the unique operational needs of our global clientele, providing a customizable approach to our customers and elevating their overall performance. We tackle critical global challenges, delivering real results that reflect our dedication to making a positive impact on employees, customers, investors, and the communities we serve.
SteraMist Integrated System The SteraMist Integrated System (“SIS”) lineup marks a significant advancement, following the SteraMist Select and SteraMist Plasma decontamination chamber products. We’ve consolidated the capabilities of these predecessors into three new offerings, providing versatile options to meet the diverse needs of our customers, both in terms of product functionality and accessibility.
SteraMist Integrated System (SIS) The SteraMist Integrated System (“SIS”) lineup marks a significant advancement providing versatile options to meet the diverse needs of our customers, both in terms of product functionality and accessibility. The SIS-Stand Alone or SIS-SA and the SIS-Pharm are now available for integrated enclosure decontamination. The SIS-SA will be stocked in inventory and applicators are sold separately.
We tackle critical global challenges, delivering real results that reflect our dedication to making a positive impact on employees, customers, investors, and the communities we serve. In an industry full of archaic methods and publicized technology, gaining acceptance from all stakeholders is a lengthy process.
In an industry full of archaic methods and publicized technology, gaining acceptance from all stakeholders is a lengthy process.
Investing in advanced technology should not solely be reactive to crises but should be seen as an integral part of a robust risk management strategy for any business. At TOMI, we are dedicated to modernizing operational efficiencies across diverse industries, including life sciences, hospital-healthcare, food safety, hospitality, and emergency service sectors.
It is imperative to emphasize the importance of a proactive approach, particularly in disinfection and decontamination. Investing in advanced technology should not solely be reactive to crises but should be seen as an integral part of a robust risk management strategy for any business.
The SIS-Stand Alone or SIS-SA, replacing the SteraMist Select, and the SIS-Pharm are now available for integrated enclosure decontamination. The SIS-SA will be stocked in inventory and showcased alongside our NV+ at InterPhex in April 2024. Conversely, the SIS-Pharm is made-to-order, delivering tailored solutions for specific customer requirements in enclosure decontamination, like our CES.
Conversely, the SIS-Pharm is made-to-order, delivering tailored solutions for specific customer requirements in enclosure decontamination, like our CES. Both offerings are crafted to streamline products while catering to individual customer needs.
Additionally, TOMI will continue to offer protocol development and implementation services for SteraMist iHP, recognizing its critical role in various settings, particularly in pandemic preparedness scenarios. Competition The environmental infectious disease control industry or disinfection, decontamination, and sanitization arena is intensely competitive and highly regulated.
Additionally, TOMI will continue to offer protocol development and implementation services for SteraMist iHP, recognizing its critical role in various settings, particularly in pandemic preparedness scenarios. New Program Offering: SteraMist Pro Certified (SPC) TOMI partners with an expansive network consisting of professionals who are exclusively licensed and trained to use the SteraMist products.
Industries & Market Segments SteraMist products are designed to address a wide spectrum of industries using iHP. Our operations consist of five main divisions based on our current target industries: Life Sciences, Hospital-HealthCare, TSN, Food Safety, and Commercial.
Our operations consist of four main divisions based on our current target industries: Life Sciences, Hospital-HealthCare, Food Safety, and Commercial. Launched in sequential order as listed to either strategically address the needs and/or ensure compliance with the specific regulations governing each industry segment.
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Regulations typically outline requirements for cleaning and disinfecting food contact surfaces, equipment, utensils, and facilities to remove dirt, debris, and harmful microorganisms. 5 Table of Contents It is imperative to emphasize the importance of a proactive approach, particularly in disinfection and decontamination.
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The needs of the pharmaceutical and vivarium space, as well as experiences with global pandemics and other heath related emergencies, such as the COVID-19 pandemics, has provided us with the opportunity and expertise to implement a clear strategy to develop and manufacture additional products to enhance and improve our portfolio.
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Our distribution network spans across the Life Sciences, Hospital-Healthcare, Food Safety, and Commercial industries. This effort along with maintaining our key current Independent Manufacturing Representatives is aimed to enhance revenue and increase brand awareness. Moving forward, we anticipate substantial benefits from these distributor groups, paving the way for growth and success in the years ahead.
Added
In addition, we continue to market and commercialize our BIT technology as an industry standard in disinfection and decontamination globally, which we believe will lead to increased market share, profitability, and capability strength. Our products are an environmentally friendly solution, and our processes address the concerns of sustainability.
Removed
As an example, the Department of Homeland Security’s Science and Technology Directorate budget overview for FY 2025 has budgeted for 16 of TOMI’s Environment units for the decommissioning of Plum Island’s labs. Not only does this signify significant growth for our Company, but it aligns with our corporate mission: Innovating for a Safer World.
Added
Customers are requesting and discussing the positive results of our product and the environmentally friendly results compared to the caustic and environmentally unfriendly results of many other disinfectants. SteraMist has established a successful track record in fighting pandemics and outbreaks and implementing SteraMist for emergency preparedness is vital.
Removed
Their early adoption of our SteraMist iHP lays a solid foundation for our future expansion.
Added
The COVID-19 pandemic took the world by surprise, and history has shown that other pandemics and viruses are likely to follow. Using a proven and trusted disinfectant for emergency outbreaks and daily for preventative maintenance, such as SteraMist, can alleviate the threat of infections from spreading and could stop a possible outbreak.
Removed
TOMI Service Network (“TSN”) TSN is an expansive network consisting of professionals who are exclusively licensed and trained to use the SteraMist products. With the purchase of SteraMist and joining TSN, TOMI trains and services a wide array of professional remediation companies in the use of SteraMist throughout the TSN division.
Added
At TOMI, we are dedicated to modernizing operational efficiencies across diverse industries, including life sciences, hospital-healthcare, food safety, hospitality, and emergency service sectors. By integrating SteraMist iHP technology into facilities proactively, we not only mitigate existing risks but also strengthen defenses against future challenges the world may face.
Removed
TSN allows for increased accessibility and brand awareness of iHP services to facilities in need of local routine and emergency disinfection and decontamination. The TSN addressed many cleaning protocols that changed permanently due to the COVID-19 pandemic, and our network plays a significant role in facilitating and maintaining these protocols.
Added
The Company is equipped for when these esteemed organizations prioritize expanding their use of SteraMist iHP and aligns with our corporate mission: Innovating for a Safer World . Industries & Market Segments SteraMist products are designed to address a wide spectrum of industries using iHP.
Removed
COVID-19 highlighted the limitations of reactive approaches to cleanliness and hygiene. Recognizing this, TOMI is now championing a proactive approach to disinfection.
Added
Additionally, investing in targeted marketing campaigns and educational initiatives to raise awareness about the benefits of automated disinfection processes can help overcome resistance to change and accelerate market penetration. 7 Table of Contents Food Safety Every day there are news articles around the world pertaining to the contamination of food supply.
Removed
By further implementing these strategies and our reach, we can effectively convey the importance of proactive disinfection and inspire action among businesses and individuals to prioritize cleanliness and hygiene in commercial settings.
Added
TOMI trains and services a wide array of professional remediation companies in the use of SteraMist. TOMI is now championing a proactive approach to disinfection. The 2020 pandemic may have initially spurred reactive measures, we are advocating for a shift towards proactive, ongoing disinfection protocols.
Removed
The ENV is sold with a case of BIT Solution of four-gallon bottles. 11 Table of Contents The SteraMist Total Disinfection Cart The Total Disinfection Cart was designed with input of public healthcare facilities EVS (Environmental Service) teams.
Added
To do this more widely, we launched the SteraMist Pro Certified (SPC) program, signifies a significant step towards industry excellence. Our aim is to establish a standard that reflects a commitment to continuous improvement, adherence to evolving disinfection and biohazard response norms, and dedication to setting benchmarks in the field.
Removed
Both offerings are crafted to streamline products while catering to individual customer needs. Furthermore, we’re collaborating with manufacturers of enclosure decontamination products to develop the SIS-MFG, formerly known as the Plasma decontamination chamber.
Added
Central to our mission is ensuring that the SPC program resonates with consumers by placing their needs at the forefront, portraying the certification as user-centric rather than SteraMist-centric. This approach is crucial in garnering recognition and legitimacy for the certification.
Removed
In the latter half of 2024, we plan to expand this department, offering IOQ/PQ services to both current and prospective customers, further solidifying our commitment to delivering comprehensive solutions and exceptional service. 14 Table of Contents INFORMATION WITH RESPECT TO OUR BUSINESS IN GENERAL Manufacturing We outsource the manufacturing and blending of our SteraMist ® line of equipment and BIT ™ Solution.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+23 added−17 removed103 unchanged
Biggest changeWe may, however, be unable to adequately preserve such rights due to a number of reasons, including the following: · our rights could be invalidated, circumvented, challenged, breached or infringed upon; · we may not have sufficient resources to adequately prosecute or protect our intellectual property rights; · upon expiration of our patents, certain of our key technology may become widely available; or · third parties may be able to develop or obtain patents for similar or competing technology.
Biggest changeWe may, however, be unable to adequately preserve such rights due to a number of reasons, including the following: · our rights could be invalidated, circumvented, challenged, breached or infringed upon; · we may not have sufficient resources to adequately prosecute or protect our intellectual property rights; · upon expiration of our patents, certain of our key technology may become widely available; or · third parties may be able to develop or obtain patents for similar or competing technology. 19 Table of Contents Although we devote resources to the establishment and protection of our patents and trademarks, the actions we have taken or will take in the future may not be adequate to prevent violation of our patents, trademarks and proprietary rights by others or prevent others from seeking to block sales of our products as an alleged violation of their patents, trademarks and proprietary rights.
Factors that may affect the volatility of our stock price include the following: · anticipated or actual fluctuations in our quarterly or annual operating results; · our success, or lack of success, in developing and marketing our products and services; · changes in general economic, political and market conditions in or any of the regions in which we conduct our business; · changes in financial estimates by us or of securities or industry analysts; 24 Table of Contents · the issuance of new or updated research reports by securities or industry analysts; · the announcement of new products, services, or technological innovations by us or our competitors; · the announcement of new customers, partners or suppliers; · the ability to collect our outstanding accounts receivable; · changes in our executive leadership; · regulatory developments in our industry affecting us, our customers or our competitors; · competition; · actual or purported “short squeeze” trading activity; and · the sale or attempted sale of a large amount of common stock, including sales of common stock following exercises of outstanding warrants.
Factors that may affect the volatility of our stock price include the following: · anticipated or actual fluctuations in our quarterly or annual operating results; · our success, or lack of success, in developing and marketing our products and services; · changes in general economic, political and market conditions in or any of the regions in which we conduct our business; · changes in financial estimates by us or of securities or industry analysts; · the issuance of new or updated research reports by securities or industry analysts; · the announcement of new products, services, or technological innovations by us or our competitors; · the announcement of new customers, partners or suppliers; · the ability to collect our outstanding accounts receivable; · changes in our executive leadership; · regulatory developments in our industry affecting us, our customers or our competitors; · competition; · actual or purported “short squeeze” trading activity; and · the sale or attempted sale of a large amount of common stock, including sales of common stock following exercises of outstanding warrants.
Our commercial success depends, in part, on our ability to obtain, maintain, defend, file new or enforce our existing patents, trademarks, trade secrets and other intellectual property rights covering our technologies and products throughout the world.
Our success depends on our ability to adequately protect our intellectual property. Our commercial success depends, in part, on our ability to obtain, maintain, defend, file new or enforce our existing patents, trademarks, trade secrets and other intellectual property rights covering our technologies and products throughout the world.
Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results. Risk Related to Our Securities Our stock price is volatile and there is a limited market for our shares.
Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results. 23 Table of Contents Risk Related to Our Securities Our stock price is volatile and there is a limited market for our shares.
If we are unable to introduce new products on our anticipated timeframe or financial cost, our business, financial condition and results of operations may suffer due to failing to remain competitive in our market. 22 Table of Contents We have a limited management team size which may reduce our ability to effectively manage our business operations as it grows.
If we are unable to introduce new products on our anticipated timeframe or financial cost, our business, financial condition and results of operations may suffer due to failing to remain competitive in our market. We have a limited management team size which may reduce our ability to effectively manage our business operations as it grows.
In the event that the price of our stock falls, we may become involved in securities class action litigation that could divert management’s attention and harm our business. 25 Table of Contents In the future, we may also issue our securities if we need to raise additional capital or in connection with acquisitions.
In the event that the price of our stock falls, we may become involved in securities class action litigation that could divert management’s attention and harm our business. In the future, we may also issue our securities if we need to raise additional capital or in connection with acquisitions.
Shane, the loss of whom would have a material adverse effect on our business. We depend to a significant degree on our ability to attract, retain and motivate quality personnel. We further note that competition for highly skilled personnel is often intense.
Shane, the loss of whom would have a material adverse effect on our business. 21 Table of Contents We depend to a significant degree on our ability to attract, retain and motivate quality personnel. We further note that competition for highly skilled personnel is often intense.
Of these, approximately 2,100,000 represent shares underlying convertible notes with an exercise price of $1.25, approximately 618,000 represent shares underlying options with exercise prices ranging from $0.80 to $7.06 per share, approximately 2.8 million represent shares underlying warrants at exercise prices ranging from $0.64 to $6.95 per share and approximately 63,750 represent shares underlying our shares of convertible $0.01 Series A preferred stock.
Of these, approximately 2,100,000 represent shares underlying convertible notes with an exercise price of $1.25, approximately 805,000 represent shares underlying options with exercise prices ranging from $0.71 to $7.06 per share, approximately 2.8 million represent shares underlying warrants at exercise prices ranging from $0.64 to $6.95 per share and approximately 63,750 represent shares underlying our shares of convertible $0.01 Series A preferred stock.
Potential acquisitions involve numerous risks, including: problems assimilating the acquired products or technologies; issues maintaining uniform standards, procedures, controls and policies; unanticipated costs associated with acquisitions; diversion of management’s attention from our existing business; risks associated with entering new markets in which we have limited or no experience; increased legal and accounting costs relating to the acquisitions or compliance with regulatory matters; and unanticipated or undisclosed liabilities of any target.
Potential acquisitions involve numerous risks, including: problems assimilating the acquired products or technologies; issues maintaining uniform standards, procedures, controls and policies; unanticipated costs associated with acquisitions; diversion of management’s attention from our existing business; risks associated with entering new markets in which we have limited or no experience; increased legal and accounting costs relating to the acquisitions or compliance with regulatory matters; and unanticipated or undisclosed liabilities of any target. 22 Table of Contents We have no current commitments with respect to any acquisition.
In addition, our demand may be affected by macro-economic factors beyond our control, including the COVID-19 pandemic, which can cause sudden and substantial increase or decrease of demand on short notice, making it more difficult to us to obtain accurate forecasts of customer demand.
In addition, our demand may be affected by macro-economic factors beyond our control, which can cause sudden and substantial increase or decrease of demand on short notice, making it more difficult to us to obtain accurate forecasts of customer demand.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, and suppliers or our third-party manufacturers may not be able to allocate sufficient resources to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our products and our results of operations. 20 Table of Contents Our success depends on our ability to adequately protect our intellectual property.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, and suppliers or our third-party manufacturers may not be able to allocate sufficient resources to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our products and our results of operations.
For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the availability of certain types of patent rights and enforceability of patents against third parties, including government agencies or government contractors.
For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the availability of certain types of patent rights and enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide only limited benefit or no benefit.
Our executive officers, directors and owners of 5% or more of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate approximately 23.5% of our outstanding common stock as of March 7, 2024. This percentage includes outstanding shares of common stock, convertible preferred stock, warrant and stock options that are vested and exercisable as of that date.
Our executive officers, directors and owners of 5% or more of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate approximately 24.2% of our outstanding common stock as of March 10, 2025. This percentage includes outstanding shares of common stock, convertible preferred stock, warrant and stock options that are vested and exercisable as of that date.
Risk Related to Our Company and Business We have a history of losses and may not be able to achieve profitability in the future. We generated a net loss of approximately $3.4 and $2.9 million for the years ended December 31, 2023 and 2022, respectively. We also had an accumulated deficit of $49.8 million as of December 31, 2023.
Risk Related to Our Company and Business We have a history of losses and may not be able to achieve profitability in the future. We generated a net loss of approximately $4.5 and $3.4 million for the years ended December 31, 2024 and 2023, respectively. We also had an accumulated deficit of $54.3 million as of December 31, 2024.
Our contracts and purchase commitments with customers may be canceled under certain circumstances. As a result, we are exposed to competitive price pressures on every order, and our agreements with customers do not provide assurance of future sales. Our customers are not required to make minimum purchases and may cease purchasing our products at any time without penalty.
As a result, we are exposed to competitive price pressures on every order, and our agreements with customers do not provide assurance of future sales. Our customers are not required to make minimum purchases and may cease purchasing our products at any time without penalty.
Moreover, if our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline, and we could be subject to sanctions or investigations by regulatory authorities, which would require additional financial and management resources.
Moreover, if our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, such as the material weaknesses described in “Item 9A Control and Procedures” in this Form 10-K, the market price of our stock could decline, and we could be subject to sanctions or investigations by regulatory authorities, which would require additional financial and management resources.
We have no current commitments with respect to any acquisition. We do not know if we will be able to identify acquisitions, we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products or technologies.
We do not know if we will be able to identify acquisitions, we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products or technologies.
As of December 31, 2023, we had outstanding convertible note, options, warrants and convertible preferred stock to purchase approximately an aggregate of 5.5 million shares of our common stock at exercise prices ranging from $0.80 to $6.95 per share.
As of December 31, 2024, we had outstanding convertible note, options, warrants and convertible preferred stock to purchase approximately an aggregate of 5.7 million shares of our common stock at exercise prices ranging from $0.64 to $7.06 per share.
While we experienced an increase of our revenue and net income in 2020, primarily due to a significant increase of demand for our products as protective measures against the spread of the COVID-19 disease during the pandemic, such demand subsided in 2021 as the pandemic gradually came under control, which caused us to incur a net loss in 2021 and such trend has continued.
While we experienced an increase of our revenue and net income in 2020, primarily due to a significant increase of demand for our products as protective measures against the spread of the COVID-19 disease during the pandemic, such demand subsided in 2021 as the pandemic gradually came under control, which caused us to incur a net loss in 2021 and such trend has continued, and there is no guarantee that any similar pandemic or global health crisis will emerge.
We rely upon third parties to supply us with our products. We outsource the manufacturing of our SteraMist ® line of equipment to two manufacturing companies and use contract manufacturers to build our BIT-based systems, as we do not maintain our own manufacturing facilities.
We outsource the manufacturing of our SteraMist ® line of equipment to two manufacturing companies and use contract manufacturers to build our BIT-based systems, as we do not maintain our own manufacturing facilities.
The competition includes remediators and disinfection/decontamination companies such as Steris, Bioquell (Eco-lab) and Clorox, various miscellaneous hydrogen peroxide companies, ultraviolet companies and hundreds of quad ammonia-chemical companies.
The decontamination and environmental infectious disease control industry is extremely competitive. The competition includes remediators and disinfection/decontamination companies such as Steris, Bioquell (Eco-lab) and Clorox, various miscellaneous hydrogen peroxide companies, ultraviolet companies and hundreds of quad ammonia-chemical companies.
We do not have long-term customer contracts, and our sales history or backlog cannot be relied upon as an indicator of our future sales. We do not have long-term contracts with any of our customers, and our sales history or backlog cannot be relied upon as a future indicator of our revenues.
We do not have long-term contracts with any of our customers, and our sales history or backlog cannot be relied upon as a future indicator of our revenues. Our contracts and purchase commitments with customers may be canceled under certain circumstances.
In these countries, patents may provide only limited benefit or no benefit. 21 Table of Contents Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Accordingly, efforts to protect our intellectual property rights in such countries may be inadequate.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Accordingly, efforts to protect our intellectual property rights in such countries may be inadequate.
If one or more analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause the trading price or trading volume of our common stock to decline and could result in the loss of all or part of your investment in us.
If one or more analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause the trading price or trading volume of our common stock to decline and could result in the loss of all or part of your investment in us. 24 Table of Contents Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
The failure to obtain broad market acceptance inevitably leads to substantially increased lead times for sales until our prospective customers, particularly in the Hospital-Healthcare market, are accustomed to the use of newer mechanical technology.
The failure to obtain broad market acceptance inevitably leads to substantially increased lead times for sales until our prospective customers, particularly in the Hospital-Healthcare market, are accustomed to the use of newer mechanical technology. The inability to timely meet our sales goals could adversely affect our financial condition and results of operations.
Because of our reliance upon third parties to supply us with our products, we do not have control over the manufacturing process of our third-party suppliers and are dependent on such third-party suppliers for compliance with the regulations applicable to our products.
Additionally, supply chain disruptions and access to materials have impacted our suppliers’ ability to deliver products to us in a timely manner. 18 Table of Contents Because of our reliance upon third parties to supply us with our products, we do not have control over the manufacturing process of our third-party suppliers and are dependent on such third-party suppliers for compliance with the regulations applicable to our products.
Our potential inability to integrate any acquired products or technologies effectively may adversely affect our business, operating results and financial condition. The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
If we are found to not have complied with these laws and are unable to sell out products, our business and financial results will be negatively impacted. 19 Table of Contents Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost and reduces our control over the manufacturing process.
Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost and reduces our control over the manufacturing process. We rely upon third parties to supply us with our products.
The inability to timely meet our sales goals could adversely affect our financial condition and results of operations. 18 Table of Contents We are subject to a variety of risks associated with doing business internationally. We maintain significant international operations, including operations in the U.S., Canada, Mexico, Europe, Asia Pacific and Latin America.
We are subject to a variety of risks associated with doing business internationally. We maintain significant international operations, including operations in the U.S., Canada, Mexico, Europe, Asia Pacific and Latin America. As a result, we are subject to a number of risks and complications associated with international manufacturing, sales, services, and other operations.
In addition, future changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and products and the enforcement of intellectual property.
In addition, future changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and products and the enforcement of intellectual property. 20 Table of Contents We face significant competition in our industry, some of which have longer operating histories, more established products or greater resources than we have currently.
In accordance with Nasdaq rules, we have been provided an initial period of 180 calendar days, or until August 15, 2024 (the “Compliance Date”), to regain compliance with the bid price requirement.
The notification received has no immediate effect on the Company’s Nasdaq listing. In accordance with Nasdaq rules, the Company has been provided an initial period of 180 calendar days, or until September 24, 2025 (the “Compliance Date”), to regain compliance with the Bid Price Requirement.
These include: maintaining authorized but unissued shares of our capital stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; no provision for the use of cumulative voting for the election of directors; maintaining a staggered board, limiting the speed at which our shareholders may replace our entire Board, and limiting the ability of our shareholders to call special meetings.
These include: maintaining authorized but unissued shares of our capital stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; no provision for the use of cumulative voting for the election of directors; maintaining a staggered board, limiting the speed at which our shareholders may replace our entire Board, and limiting the ability of our shareholders to call special meetings. 25 Table of Contents In addition, Florida Business Corporation Act, or FBCA, § 607.0902 generally provides that shares acquired in excess of certain specified thresholds, without first obtaining the approval of our Board, will not possess any voting rights unless such voting rights are approved by a majority of our disinterested shareholders.
Misuse of our products may cause an increased risk of injury to customers, which could harm our reputation in the marketplace, as well as lead to potential product liability lawsuits. 23 Table of Contents We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could harm our business, financial condition and operating results.
We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could harm our business, financial condition and operating results.
As a result of disclosure of information, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected.
For more information, please see risk factor above entitled “If we are unable to develop and maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results in a timely manner” As a result of disclosure of information, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.
Furthermore, the use of our products will often require or benefit from direct support from us. If our sales representatives do not achieve the productivity levels, we expect them to reach, our revenue will not grow at the rate we expect, and our financial performance will suffer.
If our sales representatives do not achieve the productivity levels, we expect them to reach, our revenue will not grow at the rate we expect, and our financial performance will suffer. 16 Table of Contents We do not have long-term customer contracts, and our sales history or backlog cannot be relied upon as an indicator of our future sales.
In late February 2022, Russia launched a large-scale military attack on Ukraine, amplifying already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including the United States, and resulting in global sanctions against Russia by various countries, including the United States, the United Kingdom, and European Union.
The recent imposition by the United States of tariffs, sanctions or other restrictions on goods exported from the United States or imported into the United States, or countermeasures imposed in response to such government actions, could increase the cost of goods for our products or reduce our ability to sell products globally, which may adversely affect our operating results and financial condition. 17 Table of Contents In late February 2022, Russia launched a large-scale military attack on Ukraine, amplifying already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including the United States, and resulting in global sanctions against Russia by various countries, including the United States, the United Kingdom, and European Union.
In addition, we have been considering increasing our headcount and expenses to support our continued product development and planned growth, and if demand for our products declines and we are unable to sustain our recent increases in our net income, we may not be able to sustain profitability.
In addition, if we decrease our headcount and expenses, we may be unable to support our continued product development and planned growth, and we may not be able to achieve profitability. Our SteraMist ® family of products currently accounts for the majority of our revenue, and our success is almost completely dependent on the success of our SteraMist ® brand.
There can be no assurance that we will be able to regain and maintain compliance with continued listing standards of the Nasdaq Capital Market.
There is no guarantee that we will be able to regain compliance with the Bid Price Requirement by the Compliance Date, and failure to do so may subject us to delisting proceedings of NASDAQ.
Removed
COVID-19 has adversely affected, and any resurgence of COVID-19 pandemic or another global health epidemic may in the future, directly or indirectly, adversely affect our business, results of operations and financial condition. COVID-19 has had a significant impact globally, prompting governments and businesses to take unprecedented measures in response.
Added
Furthermore, the use of our products will often require or benefit from direct support from us.
Removed
In the United States, COVID-19 has and may continue in the future to, directly or indirectly, adversely affect our business, results of operations and financial condition. In the future, our business could be materially adversely affected, directly or indirectly, by the widespread outbreak of contagious disease.
Added
There is substantial doubt about the company’s ability to continue as a going concern. For the years ended December 31, 2024 and 2023, our net loss was approximately $4,477,000 and $3,403,000, respectively, and the cash used in operations was approximately $1,440,000 and $3,599,000, respectively.
Removed
If national, state and local governments in affected regions implement safety precautions, similar to those implemented in response to COVID-19, including quarantines, border closures, increased border controls, travel restrictions, governmental orders and shutdowns, business closures, cancellations of public gatherings and other measures, such precautions could, and for COVID-19 did, disrupt normal business operations both in and outside of affected areas and could have significant negative impacts on businesses and financial markets worldwide.
Added
As of December 31, 2024, we had approximately $665,000 of cash and cash equivalents and an accumulated deficit of $54.3 million. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.
Removed
The impact of COVID-19 has had, and any resurgence of the COVID-19 pandemic or another pandemic or public health crisis, could in the future have, significant repercussions across regional, national and global economies and financial markets, and could trigger a period of regional, national and global economic slowdown or regional, national or global recessions.
Added
We intend to fund ongoing activities by utilizing our current cash on hand, the cash generated from operations, and by raising additional capital through equity or debt financings. We continue to pursue various options to raise capital to enhance our cash position, including more recently by issuing convertible notes to accredited investors.
Removed
The outbreak of COVID-19 in many countries adversely impacted regional, national and global economic activity and has continued to contribute to significant volatility and negative pressure in financial markets.
Added
However, there can be no assurance that we will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to us, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance.
Removed
As a result, our customers may terminate or amend their agreements for the purchase of our products and services due to bankruptcy, lack of liquidity, lack of funding, operational failures or other reasons. 17 Table of Contents Our SteraMist ® family of products currently accounts for the majority of our revenue, and our success is almost completely dependent on the success of our SteraMist ® brand.
Added
If we are found to not have complied with these laws and are unable to sell out products, our business and financial results will be negatively impacted.
Removed
As a result, we are subject to a number of risks and complications associated with international manufacturing, sales, services, and other operations.
Added
Misuse of our products may cause an increased risk of injury to customers, which could harm our reputation in the marketplace, as well as lead to potential product liability lawsuits.
Removed
Additionally, supply chain disruptions and access to materials have impacted our suppliers’ ability to deliver products to us in a timely manner.
Added
Our potential inability to integrate any acquired products or technologies effectively may adversely affect our business, operating results and financial condition.
Removed
Although we devote resources to the establishment and protection of our patents and trademarks, the actions we have taken or will take in the future may not be adequate to prevent violation of our patents, trademarks and proprietary rights by others or prevent others from seeking to block sales of our products as an alleged violation of their patents, trademarks and proprietary rights.
Added
If we are unable to develop and maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results in a timely manner Our management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S.
Removed
We face significant competition in our industry, some of which have longer operating histories, more established products or greater resources than we have currently. The decontamination and environmental infectious disease control industry is extremely competitive.
Added
GAAP. Our management also evaluates the effectiveness of our internal controls, and we disclose any changes and material weaknesses identified through such evaluation of our internal controls.
Removed
Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
Added
A material weakness is a deficiency, or a combination of deficiencies, in the internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Removed
In addition, Florida Business Corporation Act, or FBCA, § 607.0902 generally provides that shares acquired in excess of certain specified thresholds, without first obtaining the approval of our Board, will not possess any voting rights unless such voting rights are approved by a majority of our disinterested shareholders.
Added
Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
Removed
The Nasdaq Capital Market’s continued listing standards for our common stock require, among other things, that (i) we maintain a closing bid price for our common stock of at least $1.00, and (ii) we maintain: (A) stockholders’ equity of $2.5 million; (B) market value of listed securities of $35 million; or (C) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.
Added
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline.
Removed
Any failures to satisfy any continued listing requirements could lead to the receipt of a deficiency notice from the Nasdaq and ultimately to a delisting from trading of our common stock. 26 Table of Contents On February 4, 2024, we received a deficiency letter notifying us that we had not maintained a closing bid price for our common stock of at least $1.00 for a 30-day period.
Added
As disclosed in Item 9A of this Form 10-K , we concluded that as of December 31, 2024, material weaknesses existed because (I) There are limited resources within the finance and accounting departments with sufficient knowledge and experience in applying U.S.
Removed
If we do not regain compliance with the bid price requirement by the Compliance Date, we may be eligible for an additional 180 calendar day compliance period, otherwise our common stock will be subject to delisting from the Nasdaq Capital Market.
Added
GAAP, including but not limited to developing appropriate accounting estimates, reserves, and allowances in a timely manner and to maintain proper segregation of duties; and (II) Policies and procedures with respect to the review, supervision and monitoring of our accounting and SEC reporting functions were either not designed and in place or not operating effectively, For a detailed description of such material weaknesses, please see Item 9A Control and Procedures.
Removed
We cannot be certain that we will be able to regain compliance and then maintain compliance with the minimum bid price and the other standards in order to maintain a listing of our common stock on the Nasdaq Capital Market.
Added
In response to the material weaknesses, we are in the process of developing and implementing remediation plans, which include, among other things (i) We plan to expand the resources within the finance and accounting departments with personnel who possess sufficient knowledge and experience in applying U.S.
Removed
If our common stock were delisted from the Nasdaq Capital Market, among other things, this could result in a number of negative implications, including reduced liquidity in our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws as well as the potential loss of confidence by suppliers, customers and employees, institutional investor interest, fewer business development opportunities, greater difficulty in obtaining financing and breaches of certain contractual obligations.
Added
GAAP, including but not limited to developing appropriate accounting estimates, reserves, and allowances in a timely manner and to maintain proper segregation of duties.
Added
(ii) We will design and implement additional policies and procedures with respect to the review, supervision and monitoring of our accounting and SEC reporting functions to improve the effectiveness of our internal controls and to ensure the timely reporting with the SEC in accordance with GAAP.
Added
(iii) We will continue to recruit and train personnel with appropriate internal controls, accounting knowledge and experience commensurate with our accounting and reporting requirements, in addition to engaging and utilizing third party consultants and specialists.
Added
Our management also continued to reallocate and align roles and responsibilities within the accounting team to optimize and leverage the skills and experience of various personnel. See Item 9A Control and Procedures .
Added
While we believe these measures will remediate the control deficiencies we have identified and strengthen our internal control over financial reporting, there is no guarantee that such remedial measures will be implemented successfully or completed in a timely manner, and failure to do so may adversely affect the Company.
Added
If such claims are successful, our business and operating results could be adversely affected.
Added
On March 28, 2025, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying us that, for the preceding 30 consecutive business days, the closing bid price for the Company’s common stock, par value $0.01 per share (the “Common Stock”) was below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have certain processes for assessing, identifying and managing cyber security risks, which are built into our overall information technology function and are designed to help protect our information assets and operations from internal and external cyber threats, and protect employee information from unauthorized access or attack, as well as secure our networks and systems.
Biggest changeWe have established internal procedures for assessing, identifying and managing cyber security risks, which are built into our overall information technology function and are designed to help protect our information assets and operations from internal and external cyber threats, and protect employee information from unauthorized access or attack, as well as secure our networks and systems.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs the company keeps up with the demand for SteraMist ® , there is a dedicated quality control room to allow our service engineers to work on machines for quick and efficient service to our customers. The lease for our U.S. headquarters has a 10-year term and provides for annual rent of approximately $160,000. 27 Table of Contents
Biggest changeAs the company keeps up with the demand for SteraMist ® , there is a dedicated quality control room to allow our service engineers to work on machines for quick and efficient service to our customers. The lease for our U.S. headquarters has a 10-year term and provides for annual rent of approximately $165,000.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed2 unchanged
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is currently listed on Nasdaq Capital Market under the symbol “TOMZ.” Shareholders As of March 13, 2024, there were 214 record holders of our common stock; however, we believe we have approximately 5,000 stockholders, including those held in street name.
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is currently listed on Nasdaq Capital Market under the symbol “TOMZ.” Shareholders As of April 9, 2025, there were 67 record holders of our common stock; however, we believe we have approximately 5,000 stockholders, including those held in street name.
On March 18, 2024, the last reported sale price of our common stock on the Nasdaq was $0.71 per share. Dividends We have not paid and do not currently intend to pay cash dividends on our common stock in the foreseeable future.
On April 9, 2025, the last reported sale price of our common stock on the Nasdaq was $0.78 per share. Dividends We have not paid and do not currently intend to pay cash dividends on our common stock in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+89 added−92 removed25 unchanged
Biggest changeThe increase in consulting fees is due to the additional business development related consulting projects which occurred in the current year period that did not occur in the prior year period. 38 Table of Contents General and Administrative Expense For The Year Ended December 31, Change 2023 2022 $ General and Administrative $ 4,571,000 $ 4,643,000 $ (72,000 ) General and administrative expense includes salaries and payroll taxes, rent, insurance expense, utilities, office expense, product registration costs and bad debt expense.
Biggest changeGeneral and Administrative Expense For The Year Ended December 31, Change 2024 2023 $ General and Administrative $ 5,123,000 $ 4,571,000 $ 552,000 General and administrative expense includes salaries and payroll taxes, rent, insurance expense, utilities, office expense, product registration costs and credit loss expense. 36 Table of Contents General and administrative expenses were $5,123,000 and $4,571,000 for the years ended December 31, 2024 and 2023, respectively, an increase of $552,000 in the current year period.
We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the years ended December 31, 2023 and 2022.
We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the years ended December 31, 2024 and 2023.
We believe our sales for our CES will continue to grow in 2024 and improve our financial results from a liquidity perspective as well as improve our operating margins due to the higher recurring solution sales we see for our CES system.
We believe our sales for our CES will continue to grow and improve our financial results from a liquidity perspective as well as improve our operating margins due to the higher recurring solution sales we see for our CES system.
We use a specific identification method based on subsequent product return activity and historical average calculation to estimate the allowance for sales returns.
We use a specific identification method based on subsequent product return activity and historical average calculations to estimate the allowance for sales returns.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations relates to the years ended December 31, 2023 and 2022.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations relates to the years ended December 31, 2024 and 2023.
Actual results could differ materially from our estimates. 41 Table of Contents The SEC defines critical accounting estimates as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and most demanding of our judgment.
Actual results could differ materially from our estimates. The SEC defines critical accounting estimates as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and the most demanding of our judgment.
Provision for Income Taxes For The Years Ended December 31, Change 2023 2022 $ Provision for Income Tax Expense (Benefit) $ - $ - $ - Provision for income tax was $0 for the years ended December 31, 2023 and 2022.
Provision for Income Taxes For The Years Ended December 31, Change 2024 2023 $ Provision for Income Tax Expense (Benefit) $ - $ - $ - Provision for income tax was $0 for the years ended December 31, 2024 and 2023.
In addition, the unit will have eight outputs where four are dedicated to our regular process of constant or pulse Injection, Dwell, and Aeration along with a light beacon status bar and four are programmable to meet the customer needs for any external equipment they may desire to work with the system.
In addition, the unit has eight (8) outputs where four (4) are dedicated to our regular process of Constant or Pulse Injection, Dwell, and Aeration along with a light beacon status bar and four (4) are programmable to meet the customer needs for any external equipment they may desire to work with the system.
The Notes are convertible into shares of our Common Stock, at the option of the holder, at a conversion price of $1.25 per share, which shall not exceed $1.55 per share.
The Notes are convertible into shares of our Common Stock, at the option of the holder, at an initial conversion price of $1.25 per share, which shall not exceed $1.55 per share.
The SteraMist Transport has seen positive reception of its SteraMist Transport unit, an all-in-one dual voltage fogging product designed to treat a wide variety of vehicle sizes with an application time of only 20 minutes per 1,000 cubic foot.
We have seen positive reception of its SteraMist Transport unit, an all-in-one dual voltage fogging product designed to treat a wide variety of vehicle sizes with an application time of only 20 minutes per 1,000 cubic feet.
The increase in depreciation expense is due to a higher amount of fixed assets being depreciated in the current year periods when compared to the same prior year period.
The decrease in depreciation expense is due to a lower amount of fixed assets being depreciated in the current year period when compared to the same prior year periods.
Professional Fees For The Year Ended December 31, Change 2023 2022 $ Professional Fees $ 576,000 $ 536,000 $ 40,000 Professional fees are comprised mainly of legal, accounting, and financial consulting fees. Professional fees were $576,000 and $536,000 for the years ended December 31, 2023 and 2022, respectively, representing an increase of approximately $40,000 in the current year period.
Professional Fees For The Year Ended December 31, Change 2024 2023 $ Professional Fees $ 597,000 $ 576,000 $ 21,000 Professional fees are comprised mainly of legal, accounting, and financial consulting fees. Professional fees were $597,000 and $576,000 for the years ended December 31, 2024 and 2023, respectively, representing an increase of approximately $21,000 in the current year period.
Cash used in operations for the year ended December 31, 2023 and 2022, was ($3,599,000) and ($1,234,000), respectively.
Cash used in operations for the year ended December 31, 2024 and 2023, was ($1,440,000) and ($3,599,000), respectively.
Financing Activities Cash provided by financing activities for the years ended December 31, 2023 and 2022 was $2,288,000 and $25,000 respectively. The cash provided by financing activities increased as a result of the proceeds from the convertible notes issued in October and November of 2023.
Financing Activities Cash provided by financing activities for the years ended December 31, 2024 and 2023 was $27,500 and $2,288,000 respectively. The cash provided by financing activities decreased as a result of the proceeds from the convertible notes issued in October and November of 2023.
Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC, Topic 606”), Revenue from Contracts with Customers.. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventory, fair values of financial instruments, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others.
On an ongoing basis, we evaluate our estimates, including those related to allowance for credit losses, inventory, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of approximately $2,339,000 and working capital of $7,903,000. Our principal capital requirements are to fund operations, invest in research and development and capital equipment, and the continued costs of compliance with public company reporting requirements.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of approximately $665,000 and working capital of $3,772,000. Our principal capital requirements are to fund operations, invest in research and development and capital equipment, and the continued costs of compliance with public company reporting requirements.
Management has taken and will endeavor to continue to take a number of actions in order to improve our results of operations and the related cash flows generated from operations in order to strengthen our financial position, including the following items: · expanding our label with the EPA to further our product registration internationally; · continued expansion of our internal sales force and manufacturer representatives in an effort to drive global revenue in all verticals; · continue research and development and add new products to our “Stera” product line; · source alternative lower-cost suppliers; · expansion of international distributors; and · continued growth in all of our verticals. 40 Table of Contents During 2022 and 2023, we experienced increased demand for our CES where we collect deposits upon the execution of the contract.
Management has taken and will endeavor to continue to take a number of actions in order to improve our results of operations and the related cash flows generated from operations in order to strengthen our financial position, including the following items: · expanding our label with the EPA to further our product registration internationally; · continued expansion of our internal sales force and manufacturer representatives in an effort to drive global revenue in all verticals; · continue research and development and add new products to our “Stera” product line; · source alternative lower-cost suppliers; · expansion of international distributors; and · continued growth in all of our verticals.
The system will now be 24 volts, allowing for universal outlet usage and convert even more of the hydrogen peroxide BIT Solution to hydroxyl radicals thus lowering H 2 O 2 PPM levels allowing for faster turnaround time.
The 24-volt model allows for universal outlet usage and convert even more of the hydrogen peroxide BIT Solution to hydroxyl radicals thus lowering H 2 O 2 PPM levels allowing for faster turnaround time.
The initial closing of the Private Placement occurred on November 7, 2023. The Notes are due on the fifth anniversary of the issuance date of the Notes and bear simple interest at a rate of 12% per annum, payable in equal monthly installments.
The Notes are due on the fifth anniversary of the issuance date of the Notes and bear simple interest at a rate of 12% per annum, payable in equal monthly installments.
The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted.
The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted.
Contract Balances As of December 31, 2023, and December 31, 2022 we did not have any unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.
Contract Balances As of December 31, 2024, and December 31, 2023 we had contract balances and unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed in the amounts of $211,724 and $0, respectively.
Further, TOMI has multiple suppliers, outsourced engineers, and software programmers to turn to for the manufacturing and installation of its SteraMist products to reduce the risks associated with the current supply chain environment. 35 Table of Contents Financial Operations Overview Our financial position as of December 31, 2023 and 2022, respectively, was as follows: December 31, 2023 December 31, 2022 Total shareholders’ equity $ 8,359,000 $ 11,448,000 Cash and cash equivalents $ 2,339,000 $ 3,867,000 Deferred Revenue $ - $ 700,000 Accounts receivable – Current, net $ 2,430,000 $ 2,772,000 Inventories $ 4,627,000 $ 4,496,000 Prepaid expenses $ 371,000 $ 338,000 Vendor Deposits $ 29,000 $ 447,000 Other Receivables $ 164,000 $ 164,000 Accounts receivable – Long Term, net $ 206,000 Current liabilities – Excluding Deferred Revenue $ 2,058,000 $ 2,591,000 Long-term liabilities – Convertible Notes $ 2,298,000 $ - Long-term liabilities – Other $ 643,000 $ 761,000 Working Capital $ 7,903,000 $ 8,844,000 During the year ended December 31, 2023, our debt and liquidity positions were affected by the following: · Net cash used in operations of approximately $3,599,000. · Net cash used in investing activities $217,000. · Net cash provided from financing activities $2,288,000.
Further, TOMI has multiple suppliers, outsourced engineers, and software programmers to turn to for the manufacturing and installation of its SteraMist products to reduce the risks associated with the current supply chain environment. 33 Table of Contents Financial Operations Overview Our financial position as of December 31, 2024 and 2023, respectively, was as follows: December 31, 2024 December 31, 2023 Total shareholders’ equity $ 4,099,000 $ 8,359,000 Cash and cash equivalents $ 665,000 $ 2,339,000 Deferred Revenue $ 212,000 $ - Accounts receivable – Current, net $ 1,881,000 $ 2,430,000 Inventories, net $ 3,578,000 $ 4,627,000 Prepaid expenses $ 333,000 $ 371,000 Vendor Deposits $ 36,000 $ 29,000 Other Receivables $ - $ 164,000 Accounts receivable – Long Term, net $ - $ 206,000 Current liabilities – Excluding Deferred Revenue $ 2,509,000 $ 2,058,000 Long-term liabilities – Convertible Notes, net $ 2,361,000 $ 2,298,000 Long-term liabilities – Other $ 513,000 $ 643,000 Working Capital $ 3,772,000 $ 7,903,000 During the year ended December 31, 2024, our debt and liquidity positions were affected by the following: · Net cash used in operations of approximately $1,440,000. · Net cash used in investing activities $262,000.
The Notes are unsecured and senior to other indebtedness subject to certain exceptions. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Selling Expenses For The Year Ended December 31, Change 2023 2022 $ Selling Expenses $ 1,351,000 $ 1,867,000 $ (516,000 ) Selling expenses for the year ended December 31, 2023 were approximately $1,351,000, as compared to $1,867,000 for the year ended December 31, 2022, representing a decrease of approximately $516,000, or 28%.
Selling Expenses For The Year Ended December 31, Change 2024 2023 $ Selling Expenses $ 1,128,000 $ 1,351,000 $ (223,000 ) Selling expenses for the year ended December 31, 2024 were approximately $1,128,000, as compared to $1,351,000 for the year ended December 31, 2023, representing a decrease of approximately $223,000, or 17%.
A breakdown of our statement of cash flows for the year ended December 31, 2023 and 2022 is provided below: For the Year Ended December 31, 2023 2022 Net Cash Provided By (Used) in Operating Activities $ (3,599,000 ) $ (1,234,000 ) Net Cash Used in Investing Activities $ (217,000 ) $ (241,000 ) Net Cash Provided By Financing Activities: $ 2,288,000 $ 25,000 Operating Activities Cash used in operating activities for the year ended December 31, 2023 and 2022 was $3,599,000 and $1,234,000, respectively.
A breakdown of our statement of cash flows for the year ended December 31, 2024 and 2023 is provided below: For the Year Ended December 31, 2024 2023 Net Cash (Used) in Operating Activities $ (1,440,000 ) $ (3,599,000 ) Net Cash (Used) in Investing Activities $ (262,000 ) $ (217,000 ) Net Cash Provided By Financing Activities: $ 27,500 $ 2,288,000 37 Table of Contents Operating Activities Cash used in operating activities for the years ended December 31, 2024 and 2023 was $1,440,000 and $3,599,000, respectively.
We must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above.
At contract inception, we assess the goods or services promised within each contract, assess whether each promised good or service is distinct and identify those that are performance obligations. 39 Table of Contents We must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above for each distinct performance obligation identified in step (ii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above.
We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all. We have no plans of incurring any debt or equity financing. 39 Table of Contents For the year ended December 31, 2023 and 2022, we incurred losses from operations of ($3,349,000) and ($2,882,000), respectively.
We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all. For the year ended December 31, 2024 and 2023, we incurred losses from operations of ($4,105,000) and ($3,349,000), respectively.
Revenue by Geographic Region For The Year Ended December 31, Change 2023 2022 $ United States $ 6,125,000 $ 6,261,000 $ (136,000 ) International 1,230,000 2,077,000 (847,000 ) Total $ 7,355,000 $ 8,338,000 $ (983,000 ) Our domestic revenue for the years ended December 31, 2023 and 2022, was $6,125,000 and $6,261,000, respectively, a decrease of $136,000 when compared to the same prior year period Internationally, our revenue for the years ended December 31, 2023 and 2022, was approximately $1,230,000 and $2,077,000, respectively, representing a decrease of $847,000.
Revenue by Geographic Region For The Years Ended December 31, Change 2024 2023 $ United States $ 6,098,000 $ 6,125,000 $ (27,000 ) International 1,641,000 1,230,000 411,000 Total $ 7,739,000 $ 7,355,000 $ 384,000 Our domestic revenue for the years ended December 31, 2024 and 2023, was $6,098,000 and $6,125,000, respectively, a decrease of $27,000 when compared to the same prior year period Internationally, our revenue for the years ended December 31, 2024 and 2023, was approximately $1,641,000 and $1,230,000, respectively, representing an increase of $411,000.
As customers mature through the product and adoption cycle and our sales pipeline converts to revenue, we expect to generate more predictable sales quarter over quarter.
The higher revenue was attributable to increased demand for our mobile units and higher iHP service revenue. As customers mature through the product and adoption cycle and our sales pipeline converts to revenue, we expect to generate more predictable sales quarter over quarter.
The increase is attributable to higher accounting and legal fees in the current year period. 37 Table of Contents Depreciation and Amortization For The Year Ended December 31, Change 2023 2022 $ Depreciation and Amortization $ 367,000 $ 329,000 $ 38,000 Depreciation and amortization were approximately $367,000 and $329,000 for the years ended December 31, 2023 and 2022, respectively, representing an increase of $38,000, or 12%.
The increase is attributable to higher accounting and legal fees in the current year period. 35 Table of Contents Depreciation and Amortization For The Year Ended December 31, Change 2024 2023 $ Depreciation and Amortization $ 297,000 $ 367,000 $ (70,000 ) Depreciation and amortization was approximately $297,000 and $367,000 for the years ended December 31, 2024 and 2023, respectively, representing a decrease of $70,000, or 19%.
This should lead to increased market share, profitability, and capability strength. Our products are an environmentally friendly solution, and our processes address the concerns of sustainability.
This should lead to increased market share, profitability, and capability strength. Our products are an environmentally friendly solution, and our processes address the concerns of sustainability. Customers are requesting and discussing the positive results of our product and the environmentally friendly results compared to the caustic and environmentally unfriendly results of many other disinfectants.
Research and Development For The Year Ended December 31, Change 2023 2022 $ Research and Development $ 492,000 $ 352,000 $ 140,000 Research and development expenses for the year ended December 31, 2023 were approximately $492,000, as compared to $352,000 for the year ended December 31, 2022, representing an increase of approximately $140,000, or 40%.
Research and Development For The Year Ended December 31, Change 2024 2023 $ Research and Development $ 291,000 $ 492,000 $ (201,000 ) Research and development expenses for the year ended December 31, 2024 were approximately $291,000, as compared to $492,000 for the year ended December 31, 2023, representing a decrease of approximately $201,000, or 41%.
This system is currently on the market, has been implemented by customers, and is receiving praise for its further developments. Our SteraMist® BIT™ solution product line is currently made up of a 32-ounce bottle for the SteraPak, a ten liter, five gallon, 55-gallon drum for our custom built-ins and our traditional one gallon bottle.
Our SteraMist® BIT™ solution product line is currently made up of a 32-ounce bottle for the SteraPak, a ten (10) liter, five (5) gallon, 55-gallon drum for our custom built-ins and our traditional one (1) gallon bottle.
We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt.
We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be at risk. Inventories Inventories are valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method.
Cost of Sales For The Year Ended December 31, Change 2023 2022 $ Cost of Sales $ 3,065,000 $ 3,278,000 $ (213,000 ) Cost of sales was $3,065,000 and $3,278,000 for the years ended December 31, 2023 and 2022, respectively, a decrease of $213,000, compared to the prior year.
Cost of Sales For The Year Ended December 31, Change 2024 2023 $ Cost of Sales $ 4,182,000 $ 3,065,000 $ 1,117,000 Cost of sales was $4,182,000 and $3,065,000 for the years ended December 31, 2024 and 2023, respectively, an increase of $1,117,000, compared to the prior year.
Long-Lived Assets Including Acquired Intangible Assets We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset.
We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories may not be usable or realized when comparing our current inventory levels to anticipated demand for our product Long-Lived Assets Including Acquired Intangible Assets We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset.
Results of Operations for the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For The Year Ended December 31, Change 2023 2022 $ Revenue, Net $ 7,355,000 $ 8,338,000 $ (983,000 ) Gross Profit 4,290,000 5,060,000 (770,000 ) Total Operating Expenses (1) 7,639,000 7,942,000 (303,000 ) Income (Loss) from Operations (3,349,000 ) (2,882,000 ) (467,000 ) Total Other Income (Expense) (53,000 ) 2,000 (55,000 ) Provision for (benefit from) Income Taxes - - - Net Income (Loss) $ (3,402,000 ) $ (2,880,000 ) (522,000 ) Basic Net Income (Loss) per share $ (0.17 ) $ (0.15 ) $ (0.02 ) Diluted Net Income (Loss) per share $ (0.17 ) $ (0.15 ) $ (0.02 ) Sales During the years ended December 31, 2023 and 2022, we had net revenue of approximately $7,355,000 and $8,338,000, respectively, representing a decrease in revenue of approximately $983,000 or 12%.
Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 For The Year Ended December 31, Change 2024 2023 $ Revenue, Net $ 7,739,000 $ 7,355,000 $ 384,000 Gross Profit 3,557,000 4,290,000 (733,000 ) Total Operating Expenses 7,662,000 7,639,000 23,000 (Loss) from Operations (4,105,000 ) (3,349,000 ) (756,000 ) Total Other Income (Expense) (372,000 ) (53,000 ) (319,000 ) Provision for (benefit from) Income Taxes - - - Net (Loss) $ (4,477,000 ) $ (3,402,000 ) (1,075,000 ) Basic Net (Loss) per share $ (0.22 ) $ (0.17 ) $ (0.05 ) Diluted Net (Loss) per share $ (0.22 ) $ (0.17 ) $ (0.05 ) Sales During the years ended December 31, 2024 and 2023, we had net revenue of approximately $7,739,000 and $7,355,000, respectively, representing an increase in revenue of approximately $384,000 or 5%.
Consulting Fees For The Year Ended December 31, Change 2023 2022 $ Consulting Fees $ 283,000 $ 215,000 $ 68,000 Consulting fees were $283,000 and $215,000 for the years ended December 31, 2023 and 2022, respectively, representing an increase of $68,000, or 32%.
Consulting Fees For The Year Ended December 31, Change 2024 2023 $ Consulting Fees $ 226,000 $ 283,000 $ (57,000 ) Consulting fees were $226,000 and $283,000 for the years ended December 31, 2024 and 2023, respectively, representing a decrease of $57,000, or 20%.
The deposits we receive fund the production for the CES and improve our overall liquidity through the duration of the project.
During 2023 and 2024, we experienced increased demand for our CES where we collect deposits upon the execution of the contract. The deposits we receive fund the production for the CES and improve our overall liquidity through the duration of the project.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Accounts Receivable Our accounts receivable are typically from credit worthy customers or, for certain international customers, are supported by pre-payments.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. 40 Table of Contents Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances.
Product Development: Our recent products developed and launched are as follows: SteraMist Engineering continues to make strides collaborating with key manufactures of cleanroom technology and equipment developing a turnkey seamless decontamination integration to chambers, cabinets, passthroughs, isolators, cage washers, heat sterilizers, hot cells and more.
While navigating the complexities of regulatory approvals in this industry can be challenging, we are committed to our mission of "innovating for a safer world." Product Development: SteraMist Engineering continues to make strides collaborating with key manufactures of cleanroom technology and equipment developing a turnkey seamless decontamination integration to chambers, cabinets, passthroughs, isolators, cage washers, heat sterilizers, hot cells and more.
For those customers to whom we extend credit, we perform periodic evaluations of them and maintain allowances for potential credit losses as deemed necessary. We have a policy of reserving for credit losses based on our best estimate of the amount of potential credit losses in existing accounts receivable.
We have a policy of reserving for credit losses based on our best estimate of the amount of potential credit losses in existing accounts receivable.
Supply Chain: We have orders for supplies and materials that are required in our equipment and are prepared to continue the manufacturing of all our products.
We expect these new products and service introductions will positively impact our net sales, cost of sales and operating expenses during this fiscal year. Supply Chain: We have orders for supplies and materials that are required in our equipment and are prepared to continue the manufacturing of all our products.
The COVID-19 pandemic took the world by surprise, and history has shown that other pandemics and viruses are likely to follow.
SteraMist has established a successful track record in fighting pandemics and outbreaks and implementing SteraMist for emergency preparedness is vital. The COVID-19 pandemic took the world by surprise, and history has shown that other pandemics and viruses are likely to follow.
Recently, TOMI successfully installed the first SteraMist Hybrid at Indigo Pharmaceutical, Inc.’s existing research facility, which selected the SteraMist Hybrid because it met the client’s strict delivery timeline while adhering to the facility’s budget constraints. We remain in specification discussions with Indigo for a Custom Engineered System for a future site dedicated to injectables.
TOMI successfully installed the first official SteraMist Hybrid at Xenith Pharmaceutical F/KA Indigo Pharmaceutical, Inc.’s existing research facility, which selected the SteraMist Hybrid because it met the client’s strict delivery timeline while adhering to the facility’s budget constraints. The second installation of our Hybrid system occurred in 2024 with BeSpoke Pharmaceuticals.
The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.
The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.
As of November 7, 2023, we issued and sold an aggregate of $2,600,000 of Notes to certain Investors pursuant to the SPA. The gross proceeds from the transaction are approximately $2,600,000, before deducting the placement agent’s fees and other estimated offering expenses. We intend to use the net proceeds from this offering for working capital and other general corporate purposes.
As of November 7, 2023, we issued and sold an aggregate of $2,600,000 of Notes pursuant to the SPA before deducting the placement agent’s fees and other estimated offering expenses. The initial closing of the Private Placement occurred on November 7, 2023.
We enter into contracts that can include various combinations of products and services, which are primarily distinct and accounted for as separate performance obligations. 42 Table of Contents Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when the control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for the products and services.
Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when the control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for the products and services. We also record an estimated allowance for anticipated product returns.
We expense costs to maintain certification to cost of goods sold as incurred. We review inventory on an ongoing basis, considering factors such as deterioration and obsolescence. We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories may not be usable.
Inventories consist primarily of finished goods. We expense costs to maintain certification to cost of goods sold as incurred. We review inventory on an ongoing basis, considering factors such as deterioration and obsolescence, and future customer demand.
The initial batch of this innovative product is currently in a soft launch phase and has been sold this quarter for live practical assessment with an existing international customer. The Select Plus (“Select Plus”) is a hybrid product consisting of the Company’s current Surface Select and Environment systems.
The initial batch of this innovative product is currently in a soft launch phase and was sold for live practical assessment with an existing international customer and domestic distributor. TOMI launched its fourth generation SteraMist Environment System.
Other Income and Expense For The Year Ended December 31, Change 2023 2022 $ Interest Income 12,000 2,000 10,000 Interest Expense (65,000 ) - (65,000 ) Other Income (Expense) $ (53,000 ) $ 2,000 $ (55,000 ) Amortization of deferred financing costs was approximately $10,000 and $0 for the year ended December 31, 2023 and 2022, respectively.
Other Income and Expense For The Year Ended December 31, Change 2024 2023 $ Interest Income $ 17,000 $ 12,000 $ 5,000 Interest Expense (389,000 ) (65,000 ) (324,000 ) Other Income (Expense) $ (372,000 ) $ (53,000 ) $ (319,000 ) Interest income was approximately $17,000 and $12,000 for the years ended December 31, 2024 and 2023, respectively.
Using a proven and trusted disinfectant for emergency outbreaks and daily for preventative maintenance, such as SteraMist, can alleviate the threat of infections from spreading and could stop a possible outbreak. 2023 Events and Highlights: On January 17, 2023, we announced National Health Services (NHS) Wales purchased SteraMist ionized Hydrogen Peroxide (iHP) technology further expanding our presence in Great Britain.
Using a proven and trusted disinfectant for emergency outbreaks and daily for preventative maintenance, such as SteraMist, can alleviate the threat of infections from spreading and could stop a possible outbreak. 2024 Events: On April 15, 2024, we announced our attendance at Interphex 2024 showcasing our new innovations.
Our service-based revenue for the years ended December 31, 2023 and 2022, was $1,660,000 and $1,474,000, respectively, representing a year over year increase of $186,000.
The higher revenue was attributable to increased demand for our mobile and SIS units. 34 Table of Contents Our service-based revenue for the years ended December 31, 2024 and 2023, was $1,704,000 and $1,574,000, respectively, representing a year over year increase of $130,000. The higher revenue was attributable to increased demand for our iHP services.
On November 7, 2023, we entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (collectively, the “Investors”) pursuant to which we agreed to sell and issue to the Investors in a private placement transaction (the “Private Placement”) in one or more closings up to an aggregate principal amount of $5,000,000 (the “Notes”).
However, there can be no assurance that we will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance. 38 Table of Contents On November 7, 2023, we entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (collectively, the “Investors”) pursuant to which we agreed to sell and issue to the Investors in a private placement transaction (the “Private Placement”) in one or more closings up to an aggregate principal amount of $5,000,000 (the “Notes”).
With the successful completion of each project, our iHP technology is rapidly gaining popularity as the preferred decontamination solution for pharmaceutical and biotech companies.
As these customers complete their internal evaluations and activate these iHP automated systems, we expect a significant boost in our BIT Solution sales, further enhancing our razor-and-blade business model. With the successful completion of each project, our iHP technology is rapidly gaining popularity as the preferred decontamination solution for pharmaceutical and biotech companies.
The process was successful in complete remediation of all microbial contaminants. Another partner TOMI is working with has proven SteraMist that has reduced microbial count on cannabis flower from 400cfu/g to non-detectable without affecting the level of THC. SteraMist continues to penetrate the market with additional studies and bringing on premier clients.
The process was successful in complete remediation of all microbial contaminants. Sterile Grow, a partner we welcomed in November 2023 with a substantial purchase has proven that SteraMist has the ability to reduce microbial counts on cannabis flowers from 400cfu/g to non-detectable without affecting the level of THC.
Recently issued accounting pronouncements not yet adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280).
This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU. 41 Table of Contents Recently adopted accounting pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280).
This brings the BIT Solution product line to a total of five options provided to our customers, which will benefit our razor/razor-blade business model. We expect these new products and service introductions will positively impact our net sales, cost of sales and operating expenses during this fiscal year.
This brings the BIT Solution product line to a total of five (5) options provided to our customers, which will benefit our razor/razor-blade business model, where our SteraMist delivery systems represent the razor, and our proprietary BIT Solution represents the razor blade.
The decrease in cost of sales was primarily due to the lower sales. Our gross profit as a percentage of sales for the year ended December 31, 2023 was 58.3% compared to 60.7% in the same prior period, respectively. The lower gross profit is attributable to the product mix in sales.
Our gross profit as a percentage of sales for the year ended December 31, 2024 was 46% compared to 58% in the same prior period, respectively. Before consideration of the additional inventory reserve, our gross margins were consistent with the prior year.
The increase was attributable to a higher current year loss, lower deferred revenue and accounts payable. Investing Activities Cash used in investing activities for the years ended December 31, 2023 and 2022 was $217,000 and $241,000, respectively. The decrease is attributable to fixed assets purchased in the prior year and capitalized patent and trademark costs.
Investing Activities Cash used in investing activities for the years ended December 31, 2024 and 2023 was $262,000 and $217,000, respectively. The increase was primarily attributable to additional patents granted and property and equipment purchased in the current year period.
The decrease in revenue was attributable to the timing of customer orders. We believe that we possess the best technologies in the world in the disinfection and decontamination space.
This growth was driven by higher sales of SteraMist products and mobile equipment. 29 Table of Contents We believe that we possess the best technologies in the world in the disinfection and decontamination space.
The refreshed website offers a modern, user-friendly design and streamlined navigation, providing visitors with easy access to essential information about SteraMist products and services. Business Highlights and Recent Events Revenues: Total revenue for the year ended December 31, 2023, and 2022, was $7,355,000 and $8,338,000, respectively, representing a decrease of $983,000, or 12% compared to the same prior year period.
Business Highlights and Recent Events Revenues: Total revenue for the year ended December 31, 2024, and 2023, was $7,739,000 and $7,355,000, respectively, representing an increase of $384,000, or 5% compared to the same prior year period. The increase in revenue was attributable to the timing and fulfillment of customer orders.
Further, as the COVID-19 pandemic has subsided, we expect that the demand for our products and services will continue as we are building a team to address the post COVID-19 pandemic market opportunities. 36 Table of Contents Product and Service Revenue For The Year Ended December 31, Change 2023 2022 $ SteraMist Product $ 5,695,000 $ 6,864,000 $ (1,169,000 ) Service and Training 1,660,000 1,474,000 186,000 Total $ 7,355,000 $ 8,338,000 $ (983,000 ) SteraMist product-based revenues for the years ended December 31, 2023 and 2022, were $5,695,000 and $6,864,000, representing a decrease of $1,169,000 when compared to the same prior year period.
Product and Service Revenue For The Years Ended December 31, Change 2024 2023 $ SteraMist Product $ 6,035,000 $ 5,781,000 $ 254,000 Service and Training 1,704,000 1,574,000 130,000 Total $ 7,739,000 $ 7,355,000 $ 384,000 SteraMist product-based revenues for the years ended December 31, 2024 and 2023, were $6,035,000 and $5,781,000, representing an increase of $254,000 when compared to the same prior year period.
On March 11, 2024, we announced a new groundbreaking study demonstrating the effectiveness of its solutions against foot-and-mouth disease virus (FMDV). This significant advancement supports the Company’s submission for an additional EPA label. Research Studies: TOMI continues to be active in the global market, using registrations to expand sales opportunities.
TOMI is conducting internal studies with the 0.35% on common pathogens in the food safety market to enhance protocols. On March 11, 2024, we announced a groundbreaking study demonstrating the effectiveness of iHP against foot-and-mouth disease virus or FMDV.
General and administrative expense was $4,571,000 and $4,643,000 for the years ended December 31, 2023 and 2022, respectively, a decrease of $72,000 in the current year period. The decrease in general and administrative expense is primarily attributable to lower equity-based compensation in the current year period.
Interest expense was $389,000 and $65,000 for the years ended December 31, 2024 and 2023, respectively. The increase in interest expense is primarily attributable to the convertible notes which were outstanding for a full year in 2024 compared to the last fiscal quarter for 2023.
One goal of TOMI is to make SteraMist a recommended best practice to minimize emergency responder exposures to synthetic opioids, including fentanyl and fentanyl analogs. We are also investigating whether SteraMist can play a role in controlling the environmental impact from perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA).
One goal of TOMI is to make SteraMist a recommended best practice to minimize emergency responder exposures to synthetic opioids, including fentanyl and fentanyl analogs. Finally, and although still very early in the fight against ethylene oxide, but our SIS and OEM partnerships developed in 2024 may assist in the replacement of the highly toxic EtO.
Further, as we continue to install our technology in new CES projects, the product line evolves into a comprehensive turnkey solution. 30 Table of Contents Indeed, the timing is favorable as the industry is experiencing a shift towards modular cleanroom requirements. The adaptability and efficiency offered by our iHP technology align perfectly with the changing needs of cleanroom setups.
Further, as we continue to install our technology to these projects, the product line evolves into a comprehensive turnkey solution. To enhance our turnkey solutions, the end of 2024 and the beginning of 2025 marked a significant shift in our relationships with Original Equipment Manufacturers (OEMs).
TOMI begins this endeavor with a project management, turnkey modular solution, and process design consulting firm that we have partnered with in one of our previous CES projects. 34 Table of Contents The SteraMist Hybrid, an integral component of the SteraMist ENV, SteraMist Hybrid is designed with capabilities to communicate with a facility.
This standardized solution will significantly expand our reach within the Life Sciences sector. 32 Table of Contents The SteraMist Hybrid, an integral component of the SteraMist Environment System, SteraMist Hybrid is designed with capabilities to communicate with a facility.
Removed
Annual and Quarterly Highlights Business Update During our 2023 calendar year, we continued to build out our sales infrastructure through the expansion of our distribution network, diversified our product line to support our expanding customer base and the related utilization of our SteraMist technology and delivered multiple custom engineered systems to key customers.
Added
Annual and Quarterly Highlights Business Update For the year ended December 31, 2024, we increased our year-over-year annual revenue by 5%, continued to expand our customer base, diversify our product line, and secured significant agreements and new partnerships which will enhance our ability to distribute the SteraMist brand of products and services on a global scale, aiding in the utilization of iHP technology across all divisions worldwide.
Removed
Our year-over-year revenue declined due to the timing of customer orders. In October and November of 2023, we agreed to sell and issue 12% convertible notes in a private placement in one or more closings up to an aggregate principal amount of $5,000,000.
Added
In 2024, we expanded many existing relationships and established new key contacts. Formally, we contracted with six different partners across various regions, including Malaysia, India, Canada, Korea, and the United Kingdom. These collaborations span focused industries such as pharmaceuticals, vivarium, emergency services, and general disinfection and cleaning.
Removed
As of November 7, 2023, we sold and issued an aggregate of $2,600,000 to certain investors pursuant to a Securities Purchase Agreement, dated November 7, 2023. We are using the net proceeds from this offering for working capital and other general corporate purposes.
Added
We are committed to nurturing these partnerships alongside our other 30 partners to further develop and strengthen the SteraMist brand in the global market. 27 Table of Contents In 2024, the service decontamination sector in the Life Sciences witnessed significant shifts among key competitors domestically, creating numerous opportunities for our Company.
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Management continues to focus on expanding our sales channels through the addition of distributors, outside sale representatives, internal sales staff, and external consultants. 29 Table of Contents During 2023, we focused on expanding our network of distributors and sale representative and business development initiatives.
Added
On March 7, 2024, we announced the expansion of SteraMist iHP Corporate Service, with customers securing contracts for routine business through 2026. This growth accelerated through the second and third quarters of 2024, culminating in a record-breaking revenue performance in quarter 3 2024.
Removed
We brought on and onboarded 9 distributors and 11 sales representatives, which has expanded our presence domestically and on an international basis. We anticipate the increased bandwidth of our internal and external sales channels will have a positive impact on our revenue in 2024 and beyond.
Added
Our commitment to supporting our clientele, including Pfizer, Inc. and Thermo Fisher Scientific facilities, remains strong, while we successfully onboarding new customers, including multiple smaller engagements within the Food Safety sector. These new relationships are expected to drive future sales across both capital equipment and routine service contracts.
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In addition, we entered into a contract with Vizient, Inc. increasing our presence in the U.S. healthcare system. Vizient is the largest GPO in the healthcare industry supplying around $100 billion in annual member purchasing volume.

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